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MoneyGram (MGI) Q4 Earnings Beat, Revenues Miss Estimates

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MoneyGram International Inc. MGI reported fourth-quarter 2019 adjusted income per share of 1 cent, which compared favorably with the Zacks Consensus Estimate of a loss of 2 cents. The metric was in line with the year-ago quarter figure.

MoneyGram’s results reflect transaction growth outside the United States.

MoneyGram International Inc. Price, Consensus and EPS Surprise

 

MoneyGram International Inc. Price, Consensus and EPS Surprise

MoneyGram International Inc. price-consensus-eps-surprise-chart | MoneyGram International Inc. Quote

Quarterly Details

The company’s total revenues of $323.7 million declined 6% year over year and missed the Zacks Consensus Estimate by 1.3%. The downside mainly resulted from a decline in fee and other revenues along with investment revenues.

Among the components of revenues, fees and other revenues declined 6.2% to $311.3 million, while investment revenues declined 11.4% to $12.4 million.

Adjusted EBITDA of $57.6 million declined 4% year over year.

Adjusted EBITDA margin of 17.8% improved 40 basis points year over year.
Total operating expenses declined 6% year over year to $311 million due to lower total commissions and direct transaction expenses, expenses related to transaction and operations support, expenses related to occupancy, equipment and supplies, and depreciation & amortization expenses.
                                                                        
Segments in Detail

In the Global Funds Transfer segment, money transfer revenues decreased 6.3% year over year to $299.7 million. Within the segment, money transfer revenues declined 5.6% year over year to $285.9 million and Bill payment revenues were also down by 17.9% year over year to $13.8 million. Operating margin deteriorated 30 basis points from the year-ago quarter to 1.8%.

The Financial Paper Products segment reported total revenues of $24 million, down nearly 8% year over year due to a 9.5% decline in money order revenues and a 6.5% decrease in official check revenues. Operating margin improved 150 basis points from the year-ago quarter to 33.3%.

Liquidity

The company ended 2019 with cash and cash equivalents balance of $146.8 million, up 0.9% from the 2018 end-level.

During the quarter, the company generated adjusted free cash flow of $19.8 million, down 6.2% year over year.

As of Dec 31, 2019, its pension liability was up 1.2% from the 2018-end level to $77.5 million.

Yearly Update

For 2019, adjusted diluted income per share was 3 cents per share on a reported basis.

For the year, total revenues of $1,285.1 million decreased 11% on a reported basis and 10% on a constant currency basis.

Global Funds Transfer segment’s revenues were $1,183.3 million, down 12.2% from the 2018-end level.

Adjusted EBITDA of $213.7 million declined 13% on a reported basis and decreased 11% on a constant currency basis.

Adjusted free cash flow totaled $62.4 million, down 38.2% from the 2018-end level.

1Q20 Guidance

On a constant currency basis, the company estimates total revenues of $300 million and adjusted EBITDA of $50 million for the first quarter of 2020.

Zacks Rank & Stocks to Consider

MoneyGram currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players in the same space having reported fourth-quarter earnings so far, the bottom-line results of CIT Group Inc. CIT, Moody’s Corp. MCO and American Express Company AXP surpassed estimates in the last reported quarters by 14.4%, 4.2% and 1.5%, on average, respectively.

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